When an organization is expecting to be the target of a legal action, it may be obligated to stop destruction of all documents and records which pertain to the upcoming litigation. This does not only affect data stored inside a corporate network, but also data stored by utilized cloud services (e.g. DropBox like services where various types of data can be stored). Serious consequences can follow if a company fails to comply with a duty to preserve such evidence.
Legal hold is a commonly used term for a process by which an organization must preserve and prepare all forms of documents, including, electronic communication when litigation is anticipated or confirmed. This usually involves information retention management strategies.